The bailout bill approved yesterday and signed into law by President Bush includes a bunch of tax breaks, some of which will directly affect thousands of Rhode Islanders — including parents of college students, schoolteachers, homeowners and IRA owners. Here’s a brief look at some of the breaks:

• Tuition and Fees: In general, you may claim a federal income-tax deduction of up to $4,000 for college tuition and fees. If you meet certain income limits, you may claim the break whether you list your deductions separately (a process known as “itemizing,” on Schedule A of your federal Form 1040) or simply claim a lump-sum deduction called the standard deduction.

The tuition-and-fees break expired last year. The bailout bill extends it through this year and next, said Mark A. Luscombe, a lawyer and principal analyst for tax publisher CCH Inc., a Wolters Kluwer business.

More than 18,000 Rhode Island filers claimed this break on their federal returns each year before it expired, Internal Revenue Service figures show. If you claim it, you’ll automatically get a tax benefit for it on your Rhode Island return, state Tax Administrator David M. Sullivan said.

• Schoolteachers: If you’re a schoolteacher, you generally may claim a deduction of up to $250 for classroom materials you buy on your own, without reimbursement. The break was available whether you itemized or claimed the standard deduction. But it expired last year. The bail-out law extends it through this year and next, Luscombe said. About 16,000 Rhode Island filers claimed this break on their federal returns each year before it expired. By claiming it on your federal return, you’ll automatically get a benefit for it on your Rhode Island return, Sullivan said.

• Property Tax: If you used the standard deduction, you couldn’t claim a federal income-tax deduction for local property tax. But a law enacted this summer says that if you claim the standard deduction, you may deduct up to $500 in property tax if you’re single, $1,000 if you’re married — for this year only. The bailout law extends this break through 2009.

• IRAs: If you’re 70½ or older, you may transfer up to $100,000 a year of your IRA directly to a charity without triggering any tax on the transfer. This break, popular among MoneyLine readers, expired last year. But the text of the new bail-out law makes it clear that the deal is available for this year and next.

• Sales Tax: If you itemize, you had the option of deducting your sales taxes instead of your state income taxes. The sales-tax option expired last year, but the bailout law extends it through this year and next. About 15,000 Rhode Islanders chose the sales-tax option each year before it expired, IRS figures show.

• AMT: You’re supposed to calculate your federal return two ways: first, under the usual set of rules, then under a stricter set of rules required by the alternative minimum tax (AMT) system. You pay whichever results in the higher amount of tax. More and more people are subject to the AMT. Special relief from the AMT expired last year. The bail-out law extends the relief through this year, and adds a cost-of-living feature, Luscombe said.

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